Sanofi and Regeneron opened their update on the cancer drug Zaltrap (aflibercept) on a sweet note: The FDA has granted a priority review of their new drug application for colorectal cancer. But the news wrapped a bitter pill, as they quickly went on to acknowledge that their cancer contender had failed a late-stage study for prostate cancer.

The Phase III Venice study involving patients with metastatic, androgen dependent prostate cancer "did not meet the pre-specified criterion of improvement in overall survival," the companies reported. No data was put out in the release and investigators noted that they would review the results at a later scientific meeting.

Last fall, as analysts were growing increasingly skeptical about Sanofi ($SNY) CEO Chris Viehbacher's (photo) promise for better results from the pharma giant's restructured R&D operation, the company listed Zaltrap as one of its top late-stage prospects in the pipeline. Today's mixed news may not help much in making its case for a turnaround, but the primary focus in R&D has long been on the positive colorectal cancer results seen in Phase III. And that's the note Sanofi was trying to stay focused on today.

"Sanofi and Regeneron are committed to the continued development of Zaltrap and we are very pleased that the FDA has chosen to grant priority review to Zaltrap in metastatic colorectal cancer," said Debasish Roychowdhury, who heads up Sanofi's cancer drug work. "We look forward to working closely with the FDA to potentially bring an important new option to patients with this difficult disease."